Why Is Steris (STE) Up 1% Since Last Earnings Report?

It has been about a month since the last earnings report for Steris (STE). Shares have added about 1% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Steris due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for STERIS plc before we dive into how investors and analysts have reacted as of late.

STE Q4 Earnings & Revenues Miss Estimates

STERIS plc (STE) posted fourth-quarter fiscal 2026 adjusted earnings of $2.83 per share, up 3.3% year over year. The bottom line missed the Zacks Consensus Estimate by 0.9%. 

On a GAAP basis, earnings per share (EPS) were $2.24 compared with $1.48 cents in the prior-year quarter.

STERIS posted adjusted earnings per share of $10.17 for fiscal 2026, up from $9.22 in fiscal 2025.

STE’s Revenues 

Total revenues from continuing operations rose 7.3% to $1.59 billion but lagged the Zacks Consensus Estimate of $1.60 billion by 0.5%.

Organic revenues at constant exchange rate or CER rose 5% year over year.

For fiscal 2026, the company generated total revenues of $5.94 billion, up 8.8% from the prior-year figure.

STE Reports Broad-Based Segment Growth

Healthcare remained the primary growth engine. Segment revenues increased 7% year over year to $1.14 billion, reflecting a 9% improvement in service revenues, 7% growth in consumable revenues and a 6% increase in capital equipment revenues.

Applied Sterilization Technologies (“AST”) also advanced, with revenues up 6% to $289.2 million, reflecting 10% growth in service revenues and a 62% decline in capital equipment revenues.

Life Sciences posted the fastest percentage growth, rising 9% to $162.9 million, supported by 19% growth in capital equipment, an 8% rise in service revenues and a 5% improvement in consumable revenues.

STE’s Modest Margin Profile Improvement

Gross profit increased to $697.1 million from $641.2 million in the prior-year quarter. Gross margin expanded 57 basis points (bps) year over year to 43.9%, despite a 6.2% rise in cost of revenues. 

Selling, general and administrative expenses increased 5.4% to $351.8 million and research and development expenses rose 4% to $28.8 million. Total operating expenses declined to $380.3 million, aided by the absence of the Illinois EO litigation settlement recorded in the prior-year quarter and a restructuring credit in the current period. The adjusted operating margin contracted 61 bps to 24.2%. 

STERIS’ Financial Details 

STERIS ended fiscal 2026 with a significantly higher cash position. Cash and cash equivalents totaled $439.6 million compared with $171.7 million a year ago, providing an added flexibility for shareholder returns and reinvestment.

For fiscal 2026, net cash provided by operating activities was $1.34 billion compared with $1.15 billion a year ago. The company has a five-year annualized dividend growth rate of 9.94%.

STE Issues Fiscal 2027 Outlook 

Looking ahead, STE expects fiscal 2027 as-reported revenue growth of 7-8%. Constant currency organic revenue growth is projected to be 6-7%. The Zacks Consensus Estimate is pegged at $5.94 billion, implying 8.8% growth from fiscal 2025.

Adjusted EPS are forecasted to be in the range of $11.10-$11.30, implying 9-11% growth from fiscal 2026 level. The Zacks Consensus Estimate for the metric is pegged at $10.21.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Steris has a nice Growth Score of B, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Interestingly, Steris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Steris belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Veracyte (VCYT), has gained 24.5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Veracyte reported revenues of $139.07 million in the last reported quarter, representing a year-over-year change of +21.5%. EPS of $0.52 for the same period compares with $0.31 a year ago.

For the current quarter, Veracyte is expected to post earnings of $0.44 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed +5.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Veracyte. Also, the stock has a VGM Score of C.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research